Wall Street has struggled to interpret mixed headlines from Europe this week. Cyprus secured a rescue that will stave off a collapse of its second-biggest bank over the weekend, but the island nation's lenders will remain closed until Thursday as regulators set up capital controls to prevent bank runs. The steep haircuts, as much as 80%, for people with deposits over $127,780 also caused concerns among countries that are already receiving assistance or seen as weak.

Indeed, in a sign of how the woes afflicting one of the eurozone's smallest members are penetrating its core, Italy held an auction for five-year debt that analysts at Nomura categorized as "very weak." Europe's No. 3 economy sold five-year debt at its highest yield since October 2012, although it paid the lowest yield since January on 10-year notes. In addition to the broader eurozone troubles, the country still lacks a clear government.

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Separately, a gauge of eurozone confidence from the European Commission fell to 90 in March from 91.1 in February, narrowly missing expectations of 90.4.

The euro skidded 0.7% to $1.2780 -- the lowest level against the greenback since November. Meanwhile, the Euro Stoxx 50 sold off by 1.7%.

On the American front, the New York Times reported banking giant J.P. Morgan Chase (JPM) was being probed by investigators over potentially failing to inform federal regulators about improprieties regarding convicted fraudster Bernie Madoff. Madoff sent an email to FOX Business' Adam Shapiro Tuesday saying he had specific information suggesting banks are complicit in one of the biggest frauds in history.

Wal-Mart (WMT) said it would likely take an indeterminate loss as a result of an investigation into bribery at its Mexico subsidiary.

The data docket is fairly light, with just a report on pending home sales due at 10:00 a.m. ET. Contracts to buy existing, single-family homes are forecast to have fallen 0.2% in February from January. The housing market has been slowly recovering in recent months, but the pace has been choppy.

Elsewhere, oil futures were modestly lower. The benchmark U.S. crude oil contract dipped 52 cents, or 0.54%, to $95.84 a barrel. Wholesale New York Harbor gasoline fell 0.05% to $3.109 a gallon. In metals, gold was essentially unchanged at $1,597 a troy ounce.

Foreign Markets

The Euro Stoxx 50 sold off 1.7% to 2598, the English FTSE 100 dipped 0.67% to 6357 and the German DAX skidded 1.3% to 7781.

In Asia, the Japanese Nikkei 225 rose 0.18% to 12494 and the Chinese Hang Seng climbed 0.69% to 22465.